EXHIBIT 99.1
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 | | PRESS RELEASE |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
REPORTS STRONG FOURTH QUARTER AND
FULL YEAR 2006 RESULTS
Fourth Quarter Pro Forma Revenue Growth of 12.5%
Jacksonville, Fla. — February 6, 2007— Fidelity National Information Services, Inc. (NYSE:FIS), a leading global provider of technology services to financial institutions, today announced financial results for the fourth quarter of 2006. Consolidated revenue increased to $1.1 billion, net earnings increased to $75.1 million and net earnings per diluted share was $0.39. For the full year 2006, consolidated revenue increased to $4.1 billion, net earnings increased to $259.1 million and net earnings per diluted share was $1.37. In accordance with Generally Accepted Accounting Principles (“GAAP”), these results reflect the combination between FIS and Certegy Inc. as of February 1, 2006, the effective date of the merger.
“FIS reported excellent fourth quarter results with pro forma revenue growth of 12.5%, EBITDA growth of 11.0% and adjusted cash earnings of $0.58 per diluted share,” stated FIS Chairman William P. Foley, II. For the full year 2006, the company reported pro forma revenue growth of 8.8% and adjusted pro forma EBITDA growth of 10.6%. “We are extremely pleased with the outstanding results we achieved in 2006, which was our first year as a new public company. Our strong operating performance provides an excellent foundation for the continued growth and success of our company.”
FIS’ operating results are presented on a GAAP and on an adjusted pro forma basis, which management believes provides more meaningful comparisons between the periods presented. FIS’ pro forma results reflect a January 1, 2005, effective date for the merger between FIS and Certegy, the March 2005 recapitalization and sale of minority interests by FIS. Additionally, the adjusted pro forma results exclude merger and acquisition and integration expenses. Reconciliations between GAAP and pro forma results are provided in the attachments to this press release, which are posted on the company’s website at http://www.fidelityinfoservices.com.
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GAAP | | 4th Quarter | | 4th Quarter |
(amounts in millions) | | 2006 | | 2005 |
Total Revenue | | $1,129.1 million | | $707.7 million |
Net Earnings | | $75.1 million | | $45.5 million |
Net Earnings Per Diluted Share | | | $0.39 | | | | $0.35 | |
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Adjusted Pro Forma (see Appendix A) | | 4th Quarter | | 4th Quarter | | % |
(amounts in millions) | | 2006 | | 2005 | | Chg |
Total Revenue | | $1,129.1 million | | $1,003.6 million | | | 12.5 | % |
EBITDA | | $294.8 million | | $265.6 million | | | 11.0 | % |
Net Earnings | | $84.3 million | | $71.7 million | | | 17.7 | % |
Net Earnings Per Diluted Share | | | $0.43 | | | | $0.37 | | | | 16.2 | % |
Cash Earnings | | $111.9 million | | $100.8 million | | | 11.0 | % |
Cash Earnings Per Diluted Share | | $ | 0.58 | | | | $0.52 | | | | 11.5 | % |
FIS presents its financial results in accordance with GAAP. However, in order to provide the investment community with a broader means of evaluating the operating performance of its operations, FIS also reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), net earnings plus depreciation and amortization less capital expenditures (“Free Cash Flow”) and net earnings plus other tax-adjusted purchase price amortization (“Cash Earnings”). Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings.
Pro Forma Segment Information
FIS’ Transaction Processing Services generated revenue of $694.7 million, or 16.1% over the prior-year period, driven by 55.0% growth in International, 8.9% growth in Enterprise Solutions and 8.6% growth in Integrated Financial Solutions. The company’s new item processing operation in Brazil, new account wins and deeper penetration of the existing customer base contributed to the strong revenue growth. Transaction Processing Services’ EBITDA increased 16.6% over the prior-year quarter to $179.2 million. The EBITDA margin of 25.8% was comparable to the fourth quarter of 2005, and 160 basis points above the third quarter 2006 EBITDA margin.
Lender Processing Services revenue increased 7.9% to $437.1 million, driven by 10.6% growth in Information Services, which continues to benefit from strong results within the default solutions and appraisal product lines. Lender Processing Services’ EBITDA was $138.8 million, or 0.6%, below the prior year quarter. The EBITDA margin was 31.7% compared to 34.4% in the prior year. The declines in EBITDA and the EBITDA margin are primarily the result of strong growth in lower margin product lines, lower tax processing volumes and a decline in revenue from the company’s investment property exchange services.
Additional segment and pro forma information is provided in the following table:
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Segment Revenues | | 4th Quarter | | 4th Quarter | | |
(amounts in millions) | | 2006 | | 2005 | | % Chg. |
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Transaction Processing Services: | | | | | | | | | | | | |
Integrated Financial Solutions | | $ | 285.3 | | | $ | 262.7 | | | | 8.6 | % |
Enterprise Solutions | | | 270.4 | | | | 248.3 | | | | 8.9 | % |
International | | | 141.0 | | | | 91.0 | | | | 55.0 | % |
Other | | | (2.0 | ) | | | (3.4 | ) | | | — | |
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| | $ | 694.7 | | | $ | 598.6 | | | | 16.1 | % |
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Lender Processing Services: | | | | | | | | | | | | |
Mortgage Processing | | $ | 92.5 | | | $ | 94.0 | | | | (1.6 | )% |
Information Outsourcing | | | 344.7 | | | | 311.6 | | | | 10.6 | % |
Other | | | (0.1 | ) | | | (0.3 | ) | | | — | |
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| | $ | 437.1 | | | $ | 405.3 | | | | 7.9 | % |
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Corporate | | $ | (2.8 | ) | | $ | (0.3 | ) | | | — | |
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Total FIS | | $ | 1,129.1 | | | $ | 1,003.6 | | | | 12.5 | % |
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Pro forma corporate expense for the fourth quarter of 2006 totaled $23.3 million. The $4.5 million, or 16.1%, decline from the prior-year quarter was primarily attributable to the consolidation of duplicate administrative functions. Pro forma interest expense for the quarter increased $8.2 million to $50.8 million, driven primarily by higher interest rates. The effective tax rate was 37.1% for the quarter.
2007 Outlook
FIS provided its outlook for 2007 as follows:
| • | | Revenue growth of 7% to 9%, compared to pro forma revenue of $4.2 billion in 2006. |
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| • | | Pro forma earnings per diluted share of $1.97 to $2.03, compared to $1.52 in 2006; |
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| • | | Pro forma cash earnings per diluted share of $2.47 to $2.53, compared to $2.10 in 2006; |
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| • | | Pro forma EBITDA growth of 10% to 12%, compared to pro forma EBITDA of $1.1 billion in 2006; |
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| • | | Capital expenditures of approximately $300 million. |
| • | | Pro forma free cash flow, which the company defines as net earnings plus depreciation and amortization less capital expenditures, of $530 million to $560 million. |
The company’s 2007 guidance includes after-tax stock option expense of approximately $21.5 million, or $0.11 per diluted share. This compares to after-tax stock option expense of $31.4 million in 2006, which included $12.1 million, or $0.06 per diluted share in comparable expense, and $19.3 million in non-recurring performance based and accelerated stock option expense. The guidance excludes the remaining integration costs associated with the February 1, 2006, combination of FIS and Certegy Inc., and the previously announced first quarter 2007 non-cash charge of approximately $17.2 million after tax, or $0.09 per diluted share, incurred in conjunction with refinancing the company’s credit facilities, which was completed January 18, 2007.
FIS will host a call with investors and analysts to discuss first quarter results on Wednesday, February 7, 2007, beginning at 8:30 a.m. Eastern daylight time. Those wishing to participate via the webcast should access the call through FIS’ Investor Relations website athttp://www.fidelityinfoservices.com. Those wishing to participate via the telephone may do so by calling 800-288-8961 (USA) or 612-332-0107 (International). The webcast replay will be available on FIS’ Investor Relations website. The telephone replay will be available through February 14, 2007, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 859909.
About Fidelity National Information Services
Fidelity National Information Services, Inc. (NYSE:FIS) is a leading provider of core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top 10. Approximately 50 percent of all U.S. residential mortgages are processed using FIS software. FIS is a member of Standard and Poor’s (S&P) 500® Index and has been ranked the number one banking service provider in the world byAmerican Bankerand the research firm Financial Insights and the number two overall financial technology provider in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 7,800 financial institutions in more than 60 countries worldwide. For more information on Fidelity National Information Services, please visitwww.fidelityinfoservices.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and
information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage, which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries; failures to adapt our services to changes in technology or in the marketplace; adverse changes in the level of real estate activity, which would adversely affect certain of our businesses; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
FIS-e
SOURCE: Fidelity National Information Services, Inc.
CONTACT: Mary Waggoner, Senior Vice President, Investor Relations, 904-854-3282,
mary.waggoner@fnf.com
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FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
UNAUDITED CONSOLIDATED AND COMBINED RESULTS FOR THE QUARTERS
AND YEARS ENDING DECEMBER 31, 2006 AND 2005
(In thousands)
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| | Three months Ending December 31, | | | Twelve Months Ending December 31, | |
| | 2006 | | | 2005 | | | 2006 | | | 2005 | |
Processing and services revenues | | $ | 1,129,069 | | | $ | 707,683 | | | $ | 4,132,602 | | | $ | 2,766,085 | |
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Cost of revenues | | | 814,932 | | | | 461,912 | | | | 2,929,567 | | | | 1,793,285 | |
Selling, general, and administrative expenses | | | 121,209 | | | | 109,702 | | | | 505,528 | | | | 422,623 | |
Research and development costs | | | 28,019 | | | | 27,714 | | | | 105,580 | | | | 113,498 | |
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Operating income | | | 164,909 | | | | 108,355 | | | | 591,927 | | | | 436,679 | |
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Other income (expense) | | | | | | | | | | | | | | | | |
Interest income | | | 845 | | | | 1,566 | | | | 4,746 | | | | 6,392 | |
Realized gains and losses | | | 1,613 | | | | (1,846 | ) | | | (224 | ) | | | (4,237 | ) |
Interest expense | | | (50,801 | ) | | | (39,421 | ) | | | (192,819 | ) | | | (126,778 | ) |
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Total other income (expense) | | | (48,343 | ) | | | (39,701 | ) | | | (188,297 | ) | | | (124,623 | ) |
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Earnings before income taxes, equity earnings and minority interest | | | 116,566 | | | | 68,654 | | | | 403,630 | | | | 312,056 | |
Income tax expense | | | 43,235 | | | | 25,539 | | | | 150,150 | | | | 116,085 | |
Equity in earnings of unconsolidated entities | | | (2,014 | ) | | | (650 | ) | | | (5,792 | ) | | | (5,029 | ) |
Minority interest | | | 225 | | | | (1,721 | ) | | | 185 | | | | 4,450 | |
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Net earnings | | $ | 75,120 | | | $ | 45,486 | | | $ | 259,087 | | | $ | 196,550 | |
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Net earnings per share-basic | | $ | 0.39 | | | $ | 0.36 | | | $ | 1.39 | | | $ | 1.54 | |
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Weighted average shares outstanding-basic | | | 190,534 | | | | 127,920 | | | | 185,926 | | | | 127,920 | |
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Net earnings per share-diluted | | $ | 0.39 | | | $ | 0.35 | | | $ | 1.37 | | | $ | 1.53 | |
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Weighted average shares outstanding-diluted | | | 194,521 | | | | 129,657 | | | | 189,196 | | | | 128,354 | |
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Appendix A- Historical Detail and Reconciliation of Non-GAAP Measures
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NOTE: | | The Adjustments Column represents pro forma adjustments relating to the merger transaction between CEY and FIS, the recapitalization transaction at FIS in March 2005, and the purchase of the remaining minority interest in Kordoba in September 2005 to reflect such transactions as if they occurred January 1, 2005 |
EBITDA Detail
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2006 Q4 | | FIS | |
Net Earnings | | $ | 75,120 | |
+ Interest Expense | | | 50,801 | |
+ Minority Interest | | | 225 | |
+ Income Taxes | | | 43,235 | |
+ Depreciation/Amort | | | 115,246 | |
- Interest Income | | | (845 | ) |
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- Equity in (Earnings) Loss of Unconsolidated Entities, net of tax | | | (2,014 | ) |
- Other (Income) Expense | | | (1,613 | ) |
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EBITDA | | $ | 280,155 | |
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EBITDA Margin
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2006 Q4 | | FIS | |
EBITDA | | $ | 280,155 | |
Revenue | | $ | 1,129,069 | |
EBITDA Margin | | | 24.8 | % |
EBIT Detail
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2006 Q4 | | FIS | |
Net Earnings | | $ | 75,120 | |
+ Interest Expense | | | 50,801 | |
+ Minority Interest | | | 225 | |
+ Income Taxes | | | 43,235 | |
- Interest Income | | | (845 | ) |
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- Equity in (Earnings) Loss of Unconsolidated Entities, net of tax | | | (2,014 | ) |
- Other (Income) Expense | | | (1,613 | ) |
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EBIT | | $ | 164,909 | |
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EBIT Margin
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2006 Q4 | | FIS | |
EBIT | | $ | 164,909 | |
Revenue | | $ | 1,129,069 | |
EBIT Margin | | | 14.6 | % |
Adjusted Diluted EPS
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2006 Q4 | | FIS | |
Net Earnings | | $ | 75,120 | |
Adjusted EPS | | $ | 0.39 | |
Diluted Shares Outstanding | | | 194,521 | |
Cash Earnings
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2006 Q4 | | FIS | |
Net Earnings | | $ | 75,120 | |
+ Tax Adjusted Purchase Price Amortization | | | 27,601 | |
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Cash Earnings | | $ | 102,721 | |
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Diluted Cash EPS | | $ | 0.53 | |
Diluted Shares Outstanding | | | 194,521 | |
Free Cash Flow
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2006 Q4 | | FIS | |
Net Earnings | | $ | 75,120 | |
+ Depreciation/Amort | | | 115,246 | |
- Capital Expenditures | | | (83,663 | ) |
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Free Cash Flow | | $ | 106,703 | |
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2006 Q4 | | | | |
Stock Compensation | | $ | 12,853 | |
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Financial Measures Excluding Selected Items | | | | |
EBITDA | | $ | 280,155 | |
M&A and Integration costs | | | 14,595 | |
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EBITDA, excluding selected items | | $ | 294,750 | |
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Net Earnings | | $ | 75,120 | |
M&A and Integration Costs, net of tax | | | 9,165 | |
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Net Earnings, excluding selected items | | $ | 84,285 | |
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Net Earnings per diluted share | | $ | 0.39 | |
M&A and Integration costs per share | | | 0.04 | |
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Net Earnings per diluted share, excluding selected items | | $ | 0.43 | |
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Net Earnings, excluding selected items | | $ | 84,285 | |
+ Tax Adjusted Purchase Price Amortization | | | 27,601 | |
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Cash Earnings, excluding selected items | | $ | 111,886 | |
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Net Earnings per diluted share, excluding selected items | | $ | 0.43 | |
+ Tax Adjusted Purchase Price Amortization-per share | | | 0.15 | |
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Cash Earnings per diluted share, excluding selected items | | $ | 0.58 | |
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Net Earnings, excluding selected items | | $ | 84,285 | |
+ Depreciation/Amort | | $ | 115,246 | |
- Capital Expenditures | | | (83,663 | ) |
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Free Cash Flow, excluding selected items | | $ | 115,868 | |
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2005 Q4 | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 45,486 | | | $ | 36,301 | | | $ | (10,135 | ) | | $ | 71,652 | |
+ Interest Expense | | | 39,421 | | | | 3,155 | | | | — | | | | 42,576 | |
+ Minority Interest | | | (1,721 | ) | | | — | | | | — | | | | (1,721 | ) |
+ Income Taxes | | | 25,539 | | | | 22,958 | | | | (6,003 | ) | | | 42,494 | |
+ Depreciation/Amort | | | 77,752 | | | | 13,506 | | | | 20,570 | | | | 111,828 | |
- Interest Income | | | (1,566 | ) | | | (2,435 | ) | | | — | | | | (4,001 | ) |
- Equity in (Earnings) Loss of Non-Consolidated | | | | | | | | | | | | | | | | |
Entities, net of tax | | | (650 | ) | | | 117 | | | | — | | | | (533 | ) |
- Other (Income) Expense | | | 1,846 | | | | 1,412 | | | | — | | | | 3,258 | |
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EBITDA | | $ | 186,107 | | | $ | 75,014 | | | $ | 4,432 | | | $ | 265,553 | |
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2005 Q4 | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
EBITDA | | $ | 186,107 | | | $ | 75,014 | | | $ | 4,432 | | | $ | 265,553 | |
Revenue | | $ | 707,683 | | | $ | 295,886 | | | $ | — | | | $ | 1,003,569 | |
EBITDA Margin | | | 26.3 | % | | | 25.4 | % | | | | | | | 26.5 | % |
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2005 Q4 | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 45,486 | | | $ | 36,301 | | | $ | (10,135 | ) | | $ | 71,652 | |
+ Interest Expense | | | 39,421 | | | | 3,155 | | | | — | | | | 42,576 | |
+ Minority Interest | | | (1,721 | ) | | | — | | | | — | | | | (1,721 | ) |
+ Income Taxes | | | 25,539 | | | | 22,958 | | | | (6,003 | ) | | | 42,494 | |
- Interest Income | | | (1,566 | ) | | | (2,435 | ) | | | — | | | | (4,001 | ) |
- Equity in (Earnings) Loss of Non-Consolidated | | | | | | | | | | | | | | | | |
Entities, net of tax | | | (650 | ) | | | 117 | | | | — | | | | (533 | ) |
- Other (Income) Expense | | | 1,846 | | | | 1,412 | | | | — | | | | 3,258 | |
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EBIT | | $ | 108,355 | | | $ | 61,508 | | | $ | (16,138 | ) | | | $153,725 | |
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2005 Q4 | | | | | | | | | | | | |
| | FIS | | | CEY | | | ADJ | | | Pro Forma | |
EBIT | | $ | 108,355 | | | $ | 61,508 | | | $ | (16,138 | ) | | $ | 153,725 | |
Revenue | | $ | 707,683 | | | $ | 295,886 | | | $ | — | | | $ | 1,003,569 | |
EBIT Margin | | | 15.3 | % | | | 20.8 | % | | | | | | | 15.3 | % |
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2005 Q4 | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 45,486 | | | $ | 36,301 | | | $ | (10,135 | ) | | $ | 71,652 | |
Adjusted EPS | | $ | 0.35 | | | | | | | | | | | $ | 0.37 | |
Diluted Shares Outstanding | | | 129,657 | | | | | | | | | | | | 193,453 | |
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2005 Q4 | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 45,486 | | | $ | 36,301 | | | $ | (10,135 | ) | | $ | 71,652 | |
+ Tax Adjusted Purchase Price Amortization | | | 17,876 | | | | 680 | | | | 10,606 | | | | 29,162 | |
| | |
Cash Earnings | | $ | 63,362 | | | $ | 36,981 | | | $ | 471 | | | $ | 100,814 | |
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|
Diluted Cash EPS | | $ | 0.49 | | | | | | | | | | | $ | 0.52 | |
Diluted Shares Outstanding | | | 129,657 | | | | — | | | | — | | | | 193,453 | |
| | | | | | | | | | | | | | | | |
2005 Q4 | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 45,486 | | | $ | 36,301 | | | $ | (10,135 | ) | | $ | 71,652 | |
+ Depreciation/Amort | | | 77,752 | | | | 13,506 | | | | 20,570 | | | | 111,828 | |
- Capital Expenditures | | | (58,168 | ) | | | (20,683 | ) | | | — | | | | (78,851 | ) |
| | |
Free Cash Flow | | $ | 65,070 | | | $ | 29,124 | | | $ | 10,435 | | | $ | 104,629 | |
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2005 Q4 | | | | | | | | | | | | | | | | |
Stock Compensation | | $ | 4,350 | | | $ | 3,005 | | | $ | (3,005 | ) | | $ | 4,350 | |
Appendix A- Historical Detail and Reconciliation of Non-GAAP Measures
| | |
NOTE: | | The Adjustments Column represents pro forma adjustments relating to the merger transaction between CEY and FIS, the recapitalization transaction at FIS in March 2005, and the purchase of the remaining minority interest in Kordoba in September 2005 to reflect such transactions as if they occurred January 1, 2005 |
EBITDA Detail
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 259,087 | | | $ | (42,523 | ) | | | (3,708 | ) | | $ | 212,856 | |
+ Interest Expense | | | 192,819 | | | | 1,081 | | | | — | | | | 193,900 | |
+ Minority Interest | | | 185 | | | | — | | | | — | | | | 185 | |
+ Income Taxes | | | 150,150 | | | | (26,396 | ) | | | (2,626 | ) | | | 121,128 | |
+ Depreciation/Amort | | | 433,550 | | | | 4,274 | | | | 6,856 | | | | 444,680 | |
- Interest Income | | | (4,746 | ) | | | — | | | | — | | | | (4,746 | ) |
- Equity in (Earnings) Loss of Unconsolidated Entities, net of tax | | | (5,792 | ) | | | — | | | | | | | | (5,792 | ) |
- Other (Income) Expense | | | 224 | | | | 123 | | | | | | | | 347 | |
| | |
EBITDA | | $ | 1,025,477 | | | $ | (63,441 | ) | | $ | 522 | | | $ | 962,558 | |
| | |
EBITDA Margin
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
EBITDA | | $ | 1,025,477 | | | $ | (63,441 | ) | | $ | 522 | | | $ | 962,558 | |
Revenue | | $ | 4,132,602 | | | $ | 92,915 | | | $ | — | | | $ | 4,225,517 | |
EBITDA Margin | | | 24.8 | % | | | -68.3 | % | | | | | | | 22.8 | % |
EBIT Detail
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 259,087 | | | $ | (42,523 | ) | | $ | (3,708 | ) | | $ | 212,856 | |
+ Interest Expense | | | 192,819 | | | | 1,081 | | | | — | | | | 193,900 | |
+ Minority Interest | | | 185 | | | | — | | | | — | | | | 185 | |
+ Income Taxes | | | 150,150 | | | | (26,396 | ) | | | (2,626 | ) | | | 121,128 | |
- Interest Income | | | (4,746 | ) | | | — | | | | — | | | | (4,746 | ) |
- Equity in (Earnings) Loss of Unconsolidated Entities, net of tax | | | (5,792 | ) | | | — | | | | — | | | | (5,792 | ) |
- Other (Income) Expense | | | 224 | | | | 123 | | | | — | | | | 347 | |
| | |
EBIT | | $ | 591,927 | | | $ | (67,715 | ) | | $ | (6,334 | ) | | $ | 517,878 | |
| | |
EBIT Margin
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
EBIT | | $ | 591,927 | | | $ | (67,715 | ) | | $ | (6,334 | ) | | $ | 517,878 | |
Revenue | | $ | 4,132,602 | | | $ | 92,915 | | | $ | — | | | $ | 4,225,517 | |
EBIT Margin | | | 14.3 | % | | | -72.9 | % | | | | | | | 12.3 | % |
Adjusted Diluted EPS
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 259,087 | | | $ | (42,523 | ) | | $ | (3,708 | ) | | $ | 212,856 | |
Adjusted EPS | | $ | 1.37 | | | | | | | | | | | $ | 1.09 | |
Diluted Shares Outstanding | | | 189,196 | | | | | | | | | | | | 194,653 | |
|
Cash Earnings | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 259,087 | | | $ | (42,523 | ) | | $ | (3,708 | ) | | $ | 212,856 | |
+ Tax Adjusted Purchase Price Amortization | | $ | 109,467 | | | | 233 | | | | 3,524 | | | | 113,224 | |
| | |
Cash Earnings | | $ | 368,554 | | | $ | (42,290 | ) | | $ | (184 | ) | | $ | 326,080 | |
| | |
Diluted Cash EPS | | $ | 1.95 | | | | | | | | | | | $ | 1.68 | |
Diluted Shares Outstanding | | | 189,196 | | | | | | | | | | | | 194,653 | |
Free Cash Flow
| | | | | | | | | | | | | | | | |
2006 Full Year | | FIS | | | CEY-Jan | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 259,087 | | | $ | (42,523 | ) | | $ | (3,708 | ) | | $ | 212,856 | |
+ Depreciation/Amort | | | 433,550 | | | | 4,274 | | | | 6,856 | | | | 444,680 | |
- Capital Expenditures | | | (300,197 | ) | | | (5,200 | ) | | | — | | | | (305,397 | ) |
| | |
Free Cash Flow | | $ | 392,440 | | | $ | (43,449 | ) | | $ | 3,148 | | | $ | 352,139 | |
| | | | | | | | | | | | | | | | |
2006 Full Year | | | | | | | | | | | | | | | | |
Stock Compensation | | $ | 50,074 | | | $ | 552 | | | $ | (552 | ) | | $ | 50,074 | |
| | | | |
Pro Forma Measures Excluding Selected Items | | | | |
Pro Forma EBITDA | | $ | 962,558 | |
M&A and Integration costs | | | 108,945 | |
Performance Based Stock Option Costs | | | 24,130 | |
| | | |
Pro Forma EBITDA, excluding selected items | | $ | 1,095,633 | |
| | | |
| | | | |
Pro Forma Net Earnings | | | 212,856 | |
M&A and Integration Costs, net of tax | | | 67,654 | |
Performance Based Stock Option Costs, net of tax | | | 14,888 | |
| | | |
Pro Forma Net Earnings, excluding selected items | | $ | 295,398 | |
| | | |
| | | | |
Weighted Average Shares | | | 189,196 | |
Adjustment as if transaction took place 1/1/2005 | | | 5,457 | |
| | | |
Pro Forma Weighted Average Shares | | | 194,653 | |
| | | |
| | | | |
Pro Forma Net Earnings per diluted share | | $ | 1.09 | |
M&A and Integration costs per share | | | 0.35 | |
Performance Based Stock Option Costs per share | | | 0.08 | |
| | | |
Pro Forma Net Earnings per diluted share, excluding selected items | | $ | 1.52 | |
| | | |
| | | | |
Net Earnings, excluding selected items | | | 295,398 | |
+ Tax Adjusted Purchase Price Amortization | | | 113,224 | |
| | | |
Cash Earnings, excluding selected items | | | 408,622 | |
| | | |
| | | | |
Net Earnings per diluted share, excluding selected items | | | 1.52 | |
+ Tax Adjusted Purchase Price Amortization-per share | | | 0.58 | |
| | | |
Cash Earnings per diluted share, excluding selected items | | $ | 2.10 | |
| | | |
| | | | |
Net Earnings, excluding selected items | | $ | 295,398 | |
+ Depreciation/Amort | | | 444,680 | |
- Capital Expenditures | | | (305,397 | ) |
| | | |
Free Cash Flow, excluding selected items | | $ | 434,681 | |
| | | |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 196,550 | | | $ | 105,514 | | | $ | (52,616 | ) | | $ | 249,448 | |
+ Interest Expense | | | 126,778 | | | | 12,832 | | | | 21,031 | | | | 160,641 | |
+ Minority Interest | | | 4,450 | | | | — | | | | (2,368 | ) | | | 2,082 | |
+ Income Taxes | | | 116,085 | | | | 68,927 | | | | (32,571 | ) | | | 152,441 | |
+ Depreciation/Amort | | | 299,638 | | | | 51,858 | | | | 83,969 | | | | 435,465 | |
- Interest Income | | | (6,392 | ) | | | (2,435 | ) | | | — | | | | (8,827 | ) |
- Equity in (Earnings) Loss of Non-Consolidated Entites, net of tax | | | (5,029 | ) | | | 117 | | | | — | | | | (4,912 | ) |
- Other (Income) Expense | | | 4,237 | | | | — | | | | — | | | | 4,237 | |
| | |
EBITDA | | $ | 736,317 | | | $ | 236,813 | | | $ | 17,445 | | | $ | 990,575 | |
| | |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
EBITDA | | $ | 736,317 | | | $ | 236,813 | | | $ | 17,445 | | | $ | 990,575 | |
Revenue | | $ | 2,766,085 | | | $ | 1,117,141 | | | $ | — | | | $ | 3,883,226 | |
EBITDA Margin | | | 26.6 | % | | | 21.2 | % | | | | | | | 25.5 | % |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 196,550 | | | $ | 105,514 | | | $ | (52,616 | ) | | $ | 249,448 | |
+ Interest Expense | | | 126,778 | | | | 12,832 | | | | 21,031 | | | | 160,641 | |
+ Minority Interest | | | 4,450 | | | | — | | | | (2,368 | ) | | | 2,082 | |
+ Income Taxes | | | 116,085 | | | | 68,927 | | | | (32,571 | ) | | | 152,441 | |
- Interest Income | | | (6,392 | ) | | | (2,435 | ) | | | — | | | | (8,827 | ) |
- Equity in (Earnings) Loss of Non-Consolidated Entities, net of tax | | | (5,029 | ) | | | 117 | | | | — | | | | (4,912 | ) |
- Other (Income) Expense | | | 4,237 | | | | — | | | | — | | | | 4,237 | |
| | |
EBIT | | $ | 436,679 | | | $ | 184,955 | | | $ | (66,524 | ) | | $ | 555,110 | |
| | |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
EBIT | | $ | 436,679 | | | $ | 184,955 | | | $ | (66,524 | ) | | $ | 555,110 | |
Revenue | | $ | 2,766,085 | | | $ | 1,117,141 | | | $ | — | | | $ | 3,883,226 | |
EBIT Margin | | | 15.8 | % | | | 16.6 | % | | | | | | | 14.3 | % |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 196,550 | | | $ | 105,514 | | | $ | (52,616 | ) | | $ | 249,448 | |
Adjusted EPS | | $ | 1.53 | | | | | | | | | | | $ | 1.30 | |
Diluted Shares Outstanding | | | 128,354 | | | | | | | | | | | | 191,580 | |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 196,550 | | | $ | 105,514 | | | $ | (52,616 | ) | | $ | 249,448 | |
+ Tax Adjusted Purchase Price Amortization | | | 78,733 | | | | 2,721 | | | | 42,425 | | | | 123,879 | |
| | |
Cash Earnings | | $ | 275,283 | | | $ | 108,235 | | | $ | (10,191 | ) | | $ | 373,327 | |
| | |
| | | | | | | | | | | | | | | | |
Diluted Cash EPS | | $ | 2.14 | | | | | | | | | | | $ | 1.95 | |
Diluted Shares Outstanding | | | 128,354 | | | | — | | | | — | | | | 191,580 | |
| | | | | | | | | | | | | | | | |
2005 Full Year | | FIS | | | CEY | | | ADJ | | | Pro Forma | |
Net Earnings | | $ | 196,550 | | | $ | 105,514 | | | $ | (52,616 | ) | | $ | 249,448 | |
+ Depreciation/Amort | | | 299,638 | | | | 51,858 | | | | 83,969 | | | | 435,465 | |
- Capital Expenditures | | | (238,665 | ) | | | (63,566 | ) | | | — | | | | (302,231 | ) |
| | |
Free Cash Flow | | $ | 257,523 | | | $ | 93,806 | | | $ | 31,353 | | | $ | 382,682 | |
| | | | | | | | | | | | | | | | |
2005 Full Year | | | | | | | | | | | | | | | | |
Stock Compensation | | $ | 20,367 | | | $ | 12,205 | | | $ | (12,205 | ) | | $ | 20,367 | |
Appendix B
Unaudited Pro Forma Combined Statement of Continuing Operations
for the Twelve Months Ended December 31, 2006
(In thousands Except Per Share Data)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | Tax Adjusted | | | | |
| | | | | | | | | | Pro Forma | | | | | | | Purchase Price | | | | |
| | Certegy-Jan | | | FIS | | | Adjustments | | | Pro Forma | | | Amortization | | | Cash Earnings | |
Total revenue | | $ | 92,915 | | | $ | 4,132,602 | | | | | | | $ | 4,225,517 | | | | | | | | | |
Total cost of revenue | | | 73,218 | | | | 2,929,567 | | | | 6,856 | | | | 3,009,641 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Gross profit (loss) | | | 19,697 | | | | 1,203,035 | | | | (6,856 | ) | | | 1,215,876 | | | | | | | | | |
General and administrative | | | 7,645 | | | | 476,350 | | | | (522 | ) | | | 483,473 | | | | | | | | | |
Research and development costs | | | — | | | | 105,580 | | | | | | | | 105,580 | | | | | | | | | |
Merger and Acquisition costs | | | 79,767 | | | | 29,178 | | | | | | | | 108,945 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Income (loss) from operations | | | (67,715 | ) | | | 591,927 | | | | (6,334 | ) | | | 517,878 | | | | | | | | | |
Interest income (expense) and other | | | (1,204 | ) | | | (188,297 | ) | | | — | | | | (189,501 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before tax and min. int | | | (68,919 | ) | | | 403,630 | | | | (6,334 | ) | | | 328,377 | | | | | | | | | |
Provision for income tax | | | (26,396 | ) | | | 150,150 | | | | (2,626 | ) | | | 121,128 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | | (42,523 | ) | | | 253,480 | | | | (3,708 | ) | | | 207,249 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Equity in earnings (loss) of unconsolidated entities, net | | | — | | | | 5,792 | | | | — | | | | 5,792 | | | | | | | | | |
Minority interests in earnings, net of tax | | | — | | | | (185 | ) | | | — | | | | (185 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net income | | $ | (42,523 | ) | | $ | 259,087 | | | $ | (3,708 | ) | | $ | 212,856 | | | $ | 113,224 | | | $ | 326,080 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income per share-basic | | $ | (0.68 | ) | | $ | 1.39 | | | | | | | $ | 1.11 | | | | | | | $ | 1.70 | |
| | | | | | | | | | | | | | | | | | | | |
Pro forma Weighted average shares-basic | | | 62,326 | | | | 185,926 | | | | | | | | 191,307 | | | | | | | | 191,307 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income per share-diluted | | $ | (0.67 | ) | | $ | 1.37 | | | | | | | $ | 1.09 | | | | | | | $ | 1.68 | |
| | | | | | | | | | | | | | | | | | | | |
Pro forma Weighted average shares-diluted | | | 63,796 | | | | 189,196 | | | | | | | | 194,652 | | | | | | | | 194,652 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Pro Forma Net Earnings | | | | | | | | | | | | | | $ | 212,856 | | | | | | | | | |
Merger and Acquisition and Integration Costs, net of tax | | | | | | | | | | | | | | | 67,654 | | | | | | | | | |
Performance Based Stock Option Costs, net of tax | | | | | | | | | | | | | | | 14,888 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Pro Forma Net Earnings, excluding selected items | | | | | | | | | | | | | | $ | 295,398 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Appendix C
Unaudited Pro Forma and Historical Segment Information
for the Quarters and Year Ended December 31, 2006 and 2005
(In thousands Except Per Share Data)
2006 — Quarter 4
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pro Forma | | | | Historical | |
| | Transaction | | | Lender | | | | | | | | | | | | Transaction | | | Lender | | | | | | | |
| | Processing | | | Processing | | | Corporate and | | | | | | | | Processing | | | Processing | | | Corporate and | | | | |
| | Services | | | Services | | | Other | | | Total | | | | Services | | | Services | | | Other | | | Total | |
Processing and services revenue | | | 694,748 | | | | 437,133 | | | | (2,812 | ) | | | 1,129,069 | | | | | 694,748 | | | | 437,133 | | | | (2,812 | ) | | | 1,129,069 | |
Cost of revenues | | | 537,295 | | | | 277,637 | | | | — | | | | 814,932 | | | | | 537,295 | | | | 277,637 | | | | — | | | | 814,932 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 157,453 | | | | 159,496 | | | | (2,812 | ) | | | 314,137 | | | | | 157,453 | | | | 159,496 | | | | (2,812 | ) | | | 314,137 | |
Selling, general and admin costs | | | 40,765 | | | | 47,124 | | | | 33,320 | | | | 121,209 | | | | | 40,765 | | | | 47,124 | | | | 33,320 | | | | 121,209 | |
Research development costs | | | 18,696 | | | | 9,323 | | | | — | | | | 28,019 | | | | | 18,696 | | | | 9,323 | | | | — | | | | 28,019 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 97,992 | | | | 103,049 | | | | (36,132 | ) | | | 164,909 | | | | | 97,992 | | | | 103,049 | | | | (36,132 | ) | | | 164,909 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 75,696 | | | | 34,933 | | | | 4,617 | | | | 115,246 | | | | | 75,696 | | | | 34,933 | | | | 4,617 | | | | 115,246 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA | | | 173,688 | | | | 137,982 | | | | (31,515 | ) | | | 280,155 | | | | | 173,688 | | | | 137,982 | | | | (31,515 | ) | | | 280,155 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ProForma EBITDA | | | 173,688 | | | | 137,982 | | | | (31,515 | ) | | | 280,155 | | | | | | | | | | | | | | | | | | |
Merger and Acquisition and Integration costs | | | 5,547 | | | | 804 | | | | 8,244 | | | | 14,595 | | | | | | | | | | | | | | | | | | |
ProForma EBITDA, excluding selected items | | | 179,235 | | | | 138,786 | | | | (23,271 | ) | | | 294,750 | | | | | | | | | | | | | | | | | | |
2006 — Full Year
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pro Forma | | | | Historical | |
| | Transaction | | | Lender | | | | | | | | | | | | Transaction | | | Lender | | | | | | | |
| | Processing | | | Processing | | | Corporate and | | | | | | | | Processing | | | Processing | | | Corporate and | | | | |
| | Services | | | Services | | | Other | | | Total | | | | Services | | | Services | | | Other | | | Total | |
Processing and services revenue | | | 2,549,741 | | | | 1,678,605 | | | | (2,829 | ) | | | 4,225,517 | | | | | 2,458,777 | | | | 1,678,606 | | | | (4,781 | ) | | | 4,132,602 | |
Cost of revenues | | | 1,994,223 | | | | 1,015,418 | | | | — | | | | 3,009,641 | | | | | 1,914,148 | | | | 1,015,419 | | | | — | | | | 2,929,567 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 555,518 | | | | 663,187 | | | | (2,829 | ) | | | 1,215,876 | | | | | 544,629 | | | | 663,187 | | | | (4,781 | ) | | | 1,203,035 | |
Selling, general and admin costs | | | 175,516 | | | | 208,698 | | | | 208,204 | | | | 592,418 | | | | | 171,106 | | | | 208,698 | | | | 125,724 | | | | 505,528 | |
Research development costs | | | 70,879 | | | | 34,701 | | | | — | | | | 105,580 | | | | | 70,879 | | | | 34,701 | | | | — | | | | 105,580 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 309,123 | | | | 419,788 | | | | (211,033 | ) | | | 517,878 | | | | | 302,644 | | | | 419,788 | | | | (130,505 | ) | | | 591,927 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 294,394 | | | | 139,815 | | | | 10,471 | | | | 444,680 | | | | | 283,354 | | | | 139,815 | | | | 10,381 | | | | 433,550 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA | | | 603,517 | | | | 559,603 | | | | (200,562 | ) | | | 962,558 | | | | | 585,998 | | | | 559,603 | | | | (120,124 | ) | | | 1,025,477 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ProForma EBITDA | | | 603,517 | | | | 559,603 | | | | (200,562 | ) | | | 962,558 | | | | | | | | | | | | | | | | | | |
Merger and Acquisition and Integration costs | | | 13,398 | | | | 4,153 | | | | 91,394 | | | | 108,945 | | | | | | | | | | | | | | | | | | |
Acceleration of performance-based shares | | | | | | | | | | | 24,130 | | | | 24,130 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ProForma EBITDA, excluding selected items | | | 616,915 | | | | 563,756 | | | | (85,038 | ) | | | 1,095,633 | | | | | | | | | | | | | | | | | | |
2005 — Quarter 4
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pro Forma | | | | Historical | |
| | Transaction | | | Lender | | | | | | | | | | | | Transaction | | | Lender | | | | | | | |
| | Processing | | | Processing | | | Corporate and | | | | | | | | Processing | | | Processing | | | Corporate and | | | | |
| | Services | | | Services | | | Other | | | Total | | | | Services | | | Services | | | Other | | | Total | |
Processing and services revenue | | | 598,576 | | | | 405,313 | | | | (320 | ) | | | 1,003,569 | | | | | 302,690 | | | | 405,313 | | | | (320 | ) | | | 707,683 | |
Cost of revenues | | | 455,542 | | | | 229,504 | | | | — | | | | 685,046 | | | | | 232,408 | | | | 229,504 | | | | — | | | | 461,912 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 143,034 | | | | 175,809 | | | | (320 | ) | | | 318,523 | | | | | 70,282 | | | | 175,809 | | | | (320 | ) | | | 245,771 | |
Selling, general and admin costs | | | 44,480 | | | | 63,062 | | | | 29,542 | | | | 137,084 | | | | | 23,873 | | | | 63,062 | | | | 22,767 | | | | 109,702 | |
Research development costs | | | 19,172 | | | | 8,542 | | | | — | | | | 27,714 | | | | | 19,172 | | | | 8,542 | | | | — | | | | 27,714 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 79,382 | | | | 104,205 | | | | (29,862 | ) | | | 153,725 | | | | | 27,237 | | | | 104,205 | | | | (23,087 | ) | | | 108,355 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 74,328 | | | | 35,358 | | | | 2,142 | | | | 111,828 | | | | | 40,522 | | | | 35,358 | | | | 1,872 | | | | 77,752 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA | | | 153,710 | | | | 139,563 | | | | (27,720 | ) | | | 265,553 | | | | | 67,759 | | | | 139,563 | | | | (21,215 | ) | | | 186,107 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
2005 — Full Year
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pro Forma | | | | Historical | |
| | Transaction | | | Lender | | | | | | | | | | | | Transaction | | | Lender | | | | | | | |
| | Processing | | | Processing | | | Corporate and | | | | | | | | Processing | | | Processing | | | Corporate and | | | | |
| | Services | | | Services | | | Other | | | Total | | | | Services | | | Services | | | Other | | | Total | |
Processing and services revenue | | | 2,325,571 | | | | 1,562,161 | | | | (4,506 | ) | | | 3,883,226 | | | | | 1,208,430 | | | | 1,562,161 | | | | (4,506 | ) | | | 2,766,085 | |
Cost of revenues | | | 1,778,630 | | | | 889,161 | | | | — | | | | 2,667,791 | | | | | 904,124 | | | | 889,161 | | | | — | | | | 1,793,285 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 546,941 | | | | 673,000 | | | | (4,506 | ) | | | 1,215,435 | | | | | 304,306 | | | | 673,000 | | | | (4,506 | ) | | | 972,800 | |
Selling, general and admin costs | | | 186,098 | | | | 234,655 | | | | 126,074 | | | | 546,827 | | | | | 94,889 | | | | 234,655 | | | | 93,079 | | | | 422,623 | |
Research development costs | | | 85,702 | | | | 27,796 | | | | — | | | | 113,498 | | | | | 85,702 | | | | 27,796 | | | | — | | | | 113,498 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 275,141 | | | | 410,549 | | | | (130,580 | ) | | | 555,110 | | | | | 123,715 | | | | 410,549 | | | | (97,585 | ) | | | 436,679 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 283,483 | | | | 144,593 | | | | 7,389 | | | | 435,465 | | | | | 148,850 | | | | 144,593 | | | | 6,195 | | | | 299,638 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA | | | 558,624 | | | | 555,142 | | | | (123,191 | ) | | | 990,575 | | | | | 272,565 | | | | 555,142 | | | | (91,390 | ) | | | 736,317 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Appendix D
Fidelity National Information Services, Inc.
Reconciliation of Non-GAAP Measures — 2007 Projections
(All amounts in millions, except per share amounts)
FIS presents its financial results in accordance with Generally Accepted Accounting Principles (“GAAP”). However, in order to provide the investment community with a more thorough means of evaluating the operating performance of its operations, FIS also reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), net earnings plus depreciation and amortization less capital expenditures (“Free Cash Flow”) and net earnings plus intangible amortization, net of income tax (“Cash Earnings”). Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings.
The amounts below are projections based on the guidance range given by FIS regarding its 2007 results. The tables below are reconciliations of pro forma projections of non-GAAP measures to the nearest GAAP measurement.
| | | | | | | | |
| | Low | | | High | |
Pro Forma 2007 Net Earnings-Projected | | | | | | | | |
Projected 2007 Net Earnings | | $ | 361 | | | $ | 372 | |
Projected Write-off of Deferred Debt Costs, net of tax | | | 17 | | | | 17 | |
Projected Merger and Acquisition Integration Costs, net of tax | | | 5 | | | | 5 | |
| | | | | | |
Pro Forma Projected Net Earnings | | $ | 383 | | | $ | 394 | |
| | | | | | |
| | | | | | | | |
Pro Forma 2007 Net Earnings Per Diluted Share-Projected | | | | | | | | |
Projected 2007 Net Earnings Per Share | | $ | 1.86 | | | $ | 1.92 | |
Projected Write-off of Deferred Debt Costs, net of tax | | | 0.09 | | | | 0.09 | |
Projected Merger and Acquisition Integration Costs, net of tax | | | 0.02 | | | | 0.02 | |
| | | | | | |
Pro Forma Projected Net Earnings per Diluted Share | | $ | 1.97 | | | $ | 2.03 | |
| | | | | | |
Projected Diluted Weighted Average Shares Outstanding | | | 194.4 | | | | 194.4 | |
| | | | | | |
| | | | | | | | |
Pro Forma 2007 Cash Earnings-Projected | | | | | | | | |
Pro Forma Projected Net Earnings | | $ | 383 | | | $ | 394 | |
Tax Adjusted Purchase Price Amortization | | | 97 | | | | 97 | |
| | | | | | |
Pro Forma Projected Cash Earnings | | $ | 480 | | | $ | 491 | |
| | | | | | |
| | | | | | | | |
Pro Forma 2007 Cash Earnings Per Diluted Share-Projected | | | | | | | | |
Pro Forma Projected Net Earnings Per Share | | $ | 1.97 | | | $ | 2.03 | |
Tax Adjusted Purchase Price Amortization Per Share | | | 0.50 | | | | 0.50 | |
| | | | | | |
Pro Forma Projected Cash Earnings Per Diluted Share | | $ | 2.47 | | | $ | 2.53 | |
| | | | | | |
| | | | | | | | |
Pro Forma EBITDA-Projected | | | | | | | | |
Pro Forma Projected Net Earnings | | $ | 383 | | | $ | 394 | |
Projected Income Tax Expense | | | 219 | | | | 223 | |
Projected Interest Expense | | | 176 | | | | 176 | |
Projected Depreciation and Amortization | | | 459 | | | | 459 | |
Projected Equity in Earnings of Subsidiaries & Minority Interest | | | (13 | ) | | | (13 | ) |
Projected Other, net (Other Income & Interest Income) | | | (18 | ) | | | (12 | ) |
| | | | | | |
Pro Forma Projected EBITDA | | $ | 1,206 | | | $ | 1,227 | |
| | | | | | |
| | | | | | | | |
Pro Forma Free Cash Flow-Projected | | | | | | | | |
Pro Forma Projected Net Earnings | | $ | 383 | | | $ | 394 | |
Projected Depreciation and Amortization | | | 459 | | | | 459 | |
Projected Capital Expenditures | | | (310 | ) | | | (290 | ) |
| | | | | | |
Pro Forma Projected Free Cash Flow | | $ | 532 | | | $ | 563 | |
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